Correlation Between North Bay and Brixton Metals
Can any of the company-specific risk be diversified away by investing in both North Bay and Brixton Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining North Bay and Brixton Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North Bay Resources and Brixton Metals, you can compare the effects of market volatilities on North Bay and Brixton Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in North Bay with a short position of Brixton Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of North Bay and Brixton Metals.
Diversification Opportunities for North Bay and Brixton Metals
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between North and Brixton is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding North Bay Resources and Brixton Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brixton Metals and North Bay is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on North Bay Resources are associated (or correlated) with Brixton Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brixton Metals has no effect on the direction of North Bay i.e., North Bay and Brixton Metals go up and down completely randomly.
Pair Corralation between North Bay and Brixton Metals
Given the investment horizon of 90 days North Bay Resources is expected to generate 3.23 times more return on investment than Brixton Metals. However, North Bay is 3.23 times more volatile than Brixton Metals. It trades about 0.09 of its potential returns per unit of risk. Brixton Metals is currently generating about -0.08 per unit of risk. If you would invest 0.07 in North Bay Resources on November 2, 2024 and sell it today you would earn a total of 0.04 from holding North Bay Resources or generate 57.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North Bay Resources vs. Brixton Metals
Performance |
| Timeline |
| North Bay Resources |
| Brixton Metals |
North Bay and Brixton Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North Bay and Brixton Metals
The main advantage of trading using opposite North Bay and Brixton Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North Bay position performs unexpectedly, Brixton Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Brixton Metals will offset losses from the drop in Brixton Metals' long position.| North Bay vs. Diamond Fields Resources | North Bay vs. EnviroGold Global Limited | North Bay vs. Gemfields Group Limited | North Bay vs. Pacific Ridge Exploration |
| Brixton Metals vs. Cartier Iron Corp | Brixton Metals vs. Condor Resources | Brixton Metals vs. Monumental Minerals Corp | Brixton Metals vs. Western Alaska Minerals |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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